§ 2779a. — Prohibition on incentive payments.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC2779a]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 39--ARMS EXPORT CONTROL
SUBCHAPTER III--MILITARY EXPORT CONTROLS
Sec. 2779a. Prohibition on incentive payments
(a) In general
No United States supplier of defense articles or services sold or
licensed under this chapter, nor any employee, agent, or subcontractor
thereof, shall, with respect to the sale or export of any such defense
article or defense service to a foreign country, make any incentive
payments for the purpose of satisfying, in whole or in part, any offset
agreement with that country.
(b) Civil penalties
Any person who violates the provisions of this section shall be
subject to the imposition of civil penalties as provided for in this
section.
(c) Presidential authority
In the enforcement of this section, the President is authorized to
exercise the same powers concerning violations and enforcement and
imposition of civil penalties which are conferred upon departments,
agencies and officials by subsections (c), (d), (e), and (f) of section
11 of the Export Administration Act of 1979 [50 App. U.S.C. 2410(c),
(d), (e), (f)], and section 12(a) of such Act [50 App. U.S.C. 2411(a)],
subject to the same terms and conditions as are applicable to such
powers under that Act [50 App. U.S.C. 2401 et seq.], except that section
11(c)(2)(B) of such Act shall not apply, and instead, as prescribed in
regulations issued under this section, the Secretary of State may assess
civil penalties for violations of this chapter and regulations
prescribed thereunder and further may commence a civil action to recover
such civil penalties, and except further that notwithstanding section
11(c) of that Act, the civil penalty for each violation of this section
may not exceed $500,000 or five times the amount of the prohibited
incentive payment, whichever is greater.
(d) Definitions
For purposes of this section--
(1) the term ``offset agreement'' means an agreement,
arrangement, or understanding between a United States supplier of
defense articles or defense services and a foreign country under
which the supplier agrees to purchase or acquire, or to promote the
purchase or acquisition by other United States persons of, goods or
services produced, manufactured, grown, or extracted, in whole or in
part, in that foreign country in consideration for the purchase by
the foreign country of defense articles or defense services from the
supplier;
(2) the term ``incentive payments'' means direct monetary
compensation made by a United States supplier of defense articles or
defense services or by any employee, agent or subcontractor thereof
to any other United States person to induce or persuade that United
States person to purchase or acquire goods or services produced,
manufactured, grown, or extracted, in whole or in part, in the
foreign country which is purchasing those defense articles or
services from the United States supplier; and
(3) the term ``United States person'' means--
(A) an individual who is a national or permanent resident
alien of the United States; and
(B) any corporation, business association, partnership,
trust, or other juridical entity--
(i) organized under the laws of the United States or any
State, the District of Columbia, or any territory or
possession of the United States; or
(ii) owned or controlled in fact by individuals
described in subparagraph (A) or by an entity described in
clause (i).
(Pub. L. 90-629, ch. 3, Sec. 39A, as added Pub. L. 103-236, title VII,
Sec. 733, Apr. 30, 1994, 108 Stat. 504; amended Pub. L. 106-113, div. B,
Sec. 1000(a)(7) [div. B, title XII, Sec. 1246, title XIII, Sec. 1303],
Nov. 29, 1999, 113 Stat. 1536, 1501A-502, 1501A-511.)
References in Text
The Export Administration Act of 1979, referred to in subsec. (c),
is Pub. L. 96-72, Sept. 29, 1979, 93 Stat. 503, as amended, which is
classified principally to section 2401 et seq. of Title 50, Appendix,
War and National Defense. For complete classification of this Act to the
Code, see Short Title note set out under section 2401 of Title 50,
Appendix, and Tables.
Amendments
1999--Subsec. (a). Pub. L. 106-113, Sec. 1000(a)(7) [title XII,
Sec. 1246(a)], inserted ``or licensed'' after ``sold'' and ``or export''
after ``sale''.
Subsec. (c). Pub. L. 106-113, Sec. 1000(a)(7) [title XIII,
Sec. 1303], inserted ``section 11(c)(2)(B) of such Act shall not apply,
and instead, as prescribed in regulations issued under this section, the
Secretary of State may assess civil penalties for violations of this
chapter and regulations prescribed thereunder and further may commence a
civil action to recover such civil penalties, and except further that''
after ``except that''.
Subsec. (d)(3)(B)(ii). Pub. L. 106-113, Sec. 1000(a)(7) [title XII,
Sec. 1246(b)], inserted ``or by an entity described in clause (i)''
after ``subparagraph (A)''.
Delegation of Functions
Functions of President under this section delegated to Secretary of
State by Memorandum of President of the United States, July 26, 1994, 59
F.R. 40205, set out as a note under section 2370a of this title.
